Rally On Australia
Surging oil prices continue to lift global investor sentiment and risk appetites. Australian shares are set to rise again today, adding to the 6.5% gain over the last two weeks. European shares rose, US indices climbed the wall of worry, and iron ore, aluminium and copper tracked higher still.
US investors are buying with gritted teeth. Despite concerns about the proximity of all-time highs better than expected house sales and strong company reporting drove gains. Thirty of thirty-two companies that reported overnight beat forecasts, confounding the bears and forcing more money to work in the market.
The strength in commodity markets is all the more impressive given recent price rises and a resurgent USD overnight. Quarterly production reports from Rio and BHP, and revenue reports from Woodside and Oilsearch, confirmed the big picture story of cost cutting and operational efficiency in a lower price environment. These factors should ensure another strong day for the Energy and Materials sectors.
The x-factor in trading today is banks. Sold off yesterday after news of higher compliance costs, a cool evaluation of the regulatory changes may see investors conclude the costs are immaterial, and prompt a reversal of yesterday’s weakness.
Frequently Asked Questions about this Article…
Australian shares are set to rise today due to surging oil prices and positive global investor sentiment, which have been driving gains in the market.
Despite recent price rises and a stronger USD, the strength in commodity markets has been impressive, with iron ore, aluminium, and copper prices tracking higher, contributing to positive market sentiment.
US investor sentiment has been buoyed by strong company earnings reports, with thirty out of thirty-two companies beating forecasts, which has driven gains despite concerns about market highs.
The Energy and Materials sectors are expected to perform strongly due to cost-cutting measures and operational efficiency reported by major companies like Rio, BHP, Woodside, and Oilsearch.
The quarterly production reports from Rio and BHP highlight their focus on cost-cutting and operational efficiency, which are key factors in maintaining strong performance in a lower price environment.
Banks might see a reversal of recent weakness if investors conclude that the higher compliance costs due to regulatory changes are immaterial, leading to renewed interest in bank stocks.
The resurgent USD has not deterred the strength in commodity markets, which continue to perform well, indicating robust global demand and investor confidence.
Global markets, including European shares and US indices, are reacting positively to better-than-expected house sales in the US, which have contributed to a rise in investor confidence and market gains.
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